Manufacturing is a small cost of just about any commercial product. The companies that produce new products like Specialized, Cannondale, Trek, etc. spend lots of R&D designing and developing. Read some of the trade magazines and see how many engineers a smaller company like Cervelo employees. I know Cervelos lead time from concept to final prototypes is something more than two years.

While the frames are built overseas, there are lots of costs in transportation, distribution, warehousing, etc. as well as advertising. Even with all this, the cost is still a fraction of what it sells to dealers and distributors for. The LBS faces employee salaries and benefits, store rent, insurance, utilities, taxes, and many other things. They build up the bike, spend time with customers selling and fitting, honor warranties, and paying in advance e for thier inventories.

Sources like BD has few of these. Then there are the Chinese clones that simply copy what someone else and has virtually done of the traditional manufacturers cost. When you buy from these sources, you really don't Ed know what you are getting. Wheels are a prime example where someone can read tests and see what works and what doesn't among name brand sources.

Several people here that are LBS owners or managers have posted, there very little money in owning stores. So the big money isn't there. Some of the large manufacturers haven't made money either because they have gone out of business. Despite the feelings of some people here, there is lots of competition in the industry. If markups were high, don't you think at least one company would lower prices and sell everything they can?